My Company

By Elizabeth Halkos

Employees just aren’t taking time off like they should. They’re not using all of their paid time off and are taking fewer getaway vacations. And studies show that isn’t beneficial for them or for their employer. Brokers can help clients improve their bottom line and achieve a better work-life balance for their employees by offering a voluntary benefit program that addresses one of the biggest issues behind not taking off: the cost of getting away.

According to Expedia’s 2013 Vacation Deprivation Study, 59 percent of Americans feel vacation-deprived. They aren’t using all of their vacation days and when they do, many aren’t actually getting away from it all. There are various reasons that vacation days go unused — failure to plan, financial worry, forgetfulness, or the feeling that one is required at work. However, the irony is that rested employees are more productive employees, so taking regular vacations may well help the company more than failing to do so.

What drives Americans to work such long hours and take few vacations? One explanation is that American workers are intrinsically “workaholics.” Getting ahead at work is fundamental to their self-image and to the image they like to project to their employer and to the outside world. Some workers take pride in the badge of honor of not taking a vacation or paid time off in years. Others may feel their employer discourages being away from work for long periods of time.

Consequently, Americans seem to treat vacations as a luxury rather than a necessity. A Workplace Options survey last year found that:

More than half of respondents (58 percent) said their employers do not encourage them to use paid time off and holidays;

45 percent of respondents feel compelled to check in on work while on vacation and 34 percent feel that their supervisor expects them to; and

American workers feel most comfortable taking off a short amount of time from work: 71 percent feel comfortable taking one day off; 64 percent feel comfortable taking off a few days; 59 percent would feel comfortable taking a full week off of work; and just 39 percent feel comfortable taking off more than a full week.

Work-life balance enables employees to feel as if they are paying attention to all the important aspects of their lives. Responses to a recent nationwide Harris Poll conducted for Purchasing Power revealed employees who don’t feel they have appropriate work-life balance are concerned about their health, work performance, spending time with loved ones and being able to ‘unplug’ from the office. Instead of enjoying the comforts that employment provides, many employees feel that they have to sacrifice them.

In the survey, employees who feel they don’t have appropriate work-life balance were asked which of the following were among their biggest concerns about it:

Not having time to take care of myself (e.g., health, diet, exercise) — 60 percent;

Burnout due to not taking time off — 57 percent;

Having to miss family/social functions because of work — 50 percent;

The long hours — 49 percent;

Guilt about not spending enough time with family — 44 percent;

Work intensity — 38 percent;

Lack of workplace flexibility (e.g., set hours, inability to work from home one day a week) – 36 percent;

Continuous flexibility (e.g., email, phone calls) — 33 percent; and

I often have to take work home — 21 percent.

The power of vacation

Using vacation days pays off for both employees and employers. Employees who take most or all of their vacation time each year perform at higher levels, are more productive and are more satisfied in their jobs than those who do not, according to a survey of HR professionals by the Society for Human Resource Management.

A vital element to having a quality work-life balance is being able to unwind while away from the office — not just after work hours, but being able to take a ‘true’ vacation. For the employees who are taking some paid time off, many actually are financially unable to leave town to take a vacation. In the Harris Poll/Purchasing Power survey:

28 percent of employees reported they did not go out of town on their vacation last year;

52 percent of those workers who did not go out of town on their vacation last year stated that the reason was cost-related. Interestingly, cost was a factor for employees in all salary ranges:

73 percent of those who earn less than $50,000 annually reported that cost was the reason they did not go away on vacation;

49 percent of workers whose salary is in the $50,001 to $74,999 range said they did not take an out-of-town vacation last year; and

50 percent of employees in the $75,000 to $99,999 salary range did not leave town for vacation.

In addition to driving higher employee performance and productivity, fully utilizing vacation time boosts organizational morale, contributes to employee wellness and results in higher employee retention. Thus, encouraging employees to use their vacation days plays a vital role in contributing to the success of the entire organization.

What employers can do

Though many employees shy away from taking days off for fear of falling behind or looking irresponsible, employers should support work-life balance by encouraging workers to use their vacation time, as it benefits both employees and the company.

Getting out of town may not be an option for many employees and a ‘staycation’ may be the way they spend their time off. However, staying in town often isn’t the best way to decompress. Having complete time away and being totally disconnected from the office can be the healthiest option.
Since cost is one of the key reasons employees aren’t taking vacations, employers can help by offering smart financing alternatives for their trips. Employers can add an employee purchase program that includes vacation packages to their voluntary benefit offerings. An employer-sponsored employee purchase program is an affordable way for employees to take a vacation. It offers a disciplined payment plan through payroll deduction that is a less expensive alternative to some credit cards or other financing options.

The Harris Poll survey of employees’ vacation practices asked employees who went out of town on vacation last year how much they spent on that vacation:

36 percent said $1,000 or less;

26 percent said $1,001 - $2,000;

20 percent said $2,001 to $3,000;

15 percent said more than $3,000.

A large percentage of U.S. workers live paycheck to paycheck, unfortunately. For those employees who don’t have cash, they generally resort to using credit cards to pay for these vacations. While this may be a good option for employees who qualify for prime credit (44 percent of Americans according to a recent Time article) and are able to make full payments, it is not the best choice for many consumers.

That’s because 56 percent of Americans have carried unpaid balances in the last 12 months, which exponentially increases the total cost, something not generally factored in when making the initial vacation purchase. For example, consider a $2,000 vacation that is paid for on a credit card with an 18 percent interest rate. If the employee gets caught in the “minimum payment” trap, it can take over ten years to pay off that vacation purchase.

By offering an employee purchase program as a payroll-deducted voluntary benefit, employers can make available a variety of vacation options such as hotels, cruises, destination packages and all-inclusive resorts that workers can responsibly acquire and have the cost deducted from their paycheck through manageable payments over 12 months.

The great news is that employees indicate that they are interested in having access to such a program. In the recent Harris Poll/Purchasing Power survey, 30 percent of employees report that they would be likely or very likely, and 57 percent said they would be at least somewhat likely, to use an employee purchase program to buy cruises, hotel rooms and vacation stays if they were offered as a payroll-deducted voluntary benefit through their worksite.
An employee purchase program promotes disciplined purchasing through manageable payments; a 12-month payment term; and pre-set spending limits and controls to prevent over-spending. For the employee, there is no down payment or ballooning interest, and no late fees beyond the all-inclusive price.

How brokers can provide a solution

Much has been written in the past year about the changing role of brokers. In today’s complex health care landscape, brokers have been called on to help employers understand and navigate PPACA. Brokers have moved beyond just selling products and are becoming consultants that help employers solve employee benefit planning issues.

The new broker role focuses more on assisting employers with their HR objectives than it does on simply presenting a variety of product offerings for the employee benefits plan. And it includes educating employers on the status of their employees’ financial well-being, its effect on the company, and the various ways, including through voluntary benefits, that employers can help employees improve their financial wellness.

Work-life balance for employees is an important HR objective because it affects company productivity. Taking a vacation – having complete time away – can be one of the healthiest steps employees can take in achieving work-life balance. Employees who take most or all of their vacation time each year perform better, are more productive and more satisfied with their jobs than those who do not.

Employers might not be able to provide unlimited vacation days for employees, but they can provide support by encouraging workers to use their vacation days and by offering an employee purchase program as a voluntary benefit that includes travel options to enable them to afford a real vacation. And because happy employees are more productive, more loyal, and healthier, it has a positive impact on the company bottom line.

Brokers who bring this new voluntary benefit option to the attention of their clients are showing they’re doing more than putting new products on the table. They’re bringing products that offer solutions to today’s HR challenges and the company’s bottom line.

Steve Savant recently shared that Why life insurance can make sense for college planning with life insurance income strategist Don Prehn, CLU, ChFC on Let's Get Down to Business http://youtu.be/9jsUd4-WOSA